WASHINGTON (CNN) -- In the largest environmental settlement in Justice Department history, American Electric Power has agreed to install $4.6 billion in equipment to sharply reduce emissions at coal-fired power plants in five states, sources said.

A company with coal-fired plants, like the one here, has settled a historic suit to reduce emissions, sources said.

AEP, one of the nation's largest power producers, owns coal-fired plants in the Ohio River Valley.

The record settlement comes eight years after the Justice Department, headed by then-Attorney General Janet Reno, filed suit alleging AEP and six other power companies had "illegally released massive amounts of air pollutants for years."

On November 3, 1999, the Justice Department filed the landmark lawsuits against the power companies alleging they violated the Clean Air Act by making major modifications to many of their plants without installing the equipment required to control smog, acid rain and soot.

"When children can't breathe because of pollution from a utility plant hundreds of miles away, something must be done," Reno declared.

The upgrades will be made at power plants in Ohio, West Virginia, Virginia, Indiana and Kentucky, the sources said.

Justice prosecutors brought the case on behalf of the Environmental Protection Agency, a dozen environmental groups and the plaintiff states of New York, New Jersey, Maryland, Connecticut, Vermont, New Hampshire, Rhode Island and Massachusetts.

Legal battles and negotiations between federal prosecutors and industry representatives continued throughout the years of the Bush administration.

The settlement requires AEP to pay a $15 million civil fine to the federal government and spend $60 million on "mitigation measures" like cleanup and repair of damaged lands, sources said.

And the company will be required to reduce nitrogen oxide by 69 percent within nine years and sulfur dioxide by 70 percent within 11 years, said sources.

Top Justice Department and EPA officials plan to announce the settlement at 9 a.m. ET Tuesday in Washington, sources said.

The officials refused to confirm the settlement, but acknowledged they would hold a news conference early Tuesday at the Justice Department to announce "a record settlement" on an environmental issue.

One of the sources familiar with the case confirmed first-hand knowledge of "very extensive" negotiations between AEP and lawyers from the EPA and Justice Department.

The government has sought to sharply reduce the amount of sulfur dioxide, nitrogen oxides and particulate matter [soot] released into the air which affect atmospheric conditions in at least 13 northeastern states.

The government charged that the Clean Air Act requires power companies to install the "best available control technology" but said the utilities did not do so when they made major modifications.

AEP had maintained its improvements amounted to "routine maintenance" and not "major modifications."

Environmental groups accused the firm of skirting the law.

Government lawyers and scientists say 70 percent of sulfur dioxide emissions each year and 30 percent of nitrogen oxide emissions are produced by electric utility plants.

Based in Columbus, Ohio, AEP provides electric power to five million customers in 11 states, according to its Web site. The company is ranked 192 on the "Fortune 500" list of corporations, on annual revenues of $12.6 billion.E-mail to a friend